What aspects of the Return-to-Growth Action Plan are most exciting, and which will impact the P&L first?

Dan Scavilla is most excited about the accelerating engagement with dentists and the positive feedback on recommitment to clinical education. He also highlighted the strength of the executive team with John Fortson joining and the expansion of U.S. dealer partnerships. He expects the dealer contributions to be heavier in the second half of the year, particularly Q4. “Honestly, what I'm most excited about is the level of engagement we have with our dentists and seeing that accelerate at different levels of the company.”

Was the tariff refund embedded in the initial guidance, and does the maintained guidance account for it? Also, what is the outlook for SG&A given past discussions on targeted annual savings?

The tariff refund was not built into the initial guidance and is in addition to the maintained base guidance. Management does not disclose the quarterly tariff rate. Regarding SG&A, while the company is reorganizing and reducing some spending, it is redeploying those savings into increasing the field force, clinical education, rep education, and accelerating innovation, rather than anticipating a direct drop-through to the bottom line. “So the first thing is we did not build a refund into our initial guidance. That was something that we decided not to do because it was uncertain when it would occur or what it would be.”

Where does the U.S. commercial team build-out stand, and does the guide contemplate accelerating productivity from these hires this year or next? What is the latest perspective on China VBP 2.0 and its impact?

Dan Scavilla stated that the U.S. commercial organization has been vertically reorganized, with strong leadership and ongoing retraining/recertification of reps. While progress is being made, the full impact of these efficiencies is expected more in 2027. For China VBP 2.0, management aligns with the view that it has been delayed and does not expect a significant impact this year, viewing China as a long-term growth area. “I really do think those efficiencies, while they will continue sequentially through the quarters as you get through Q2 to Q3 to Q4, I think are going to be more impactful into next year.”

XRAY

Dentsply Sirona (XRAY) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 6, 2026

Source: earnings call transcript

Executive summary

DENTSPLY SIRONA Q2 FY26 — Return-to-Growth Plan Progress Amidst Macro Headwinds

Dentsply Sirona continued executing its Return-to-Growth Action Plan in Q2 FY26, showing progress in customer engagement and commercial capabilities, particularly with new dealer partnerships and sales force training. While the company maintained its full-year guidance, it acknowledged ongoing macroeconomic headwinds, including regional capital equipment delays and distributor inventory reductions, which are expected to weigh on Q3 results before improvements become more visible in Q4.

Highlights

Operating cash flow increased to $99 million from $48 million in the prior year quarter.
Tariff refunds of $44 million translated to a positive $0.17 per share impact.
Wellspect Healthcare revenue grew 7.1% as reported to $86 million, driven by new product sales.
Adjusted EBITDA margins were approximately flat year-over-year.
Repurchased 1.3 million shares at an average price below $10 per share.

Concerns

Total revenue decreased 4.1% as reported, or 6.3% on a constant currency basis, to $898 million.
OIS revenue declined 13.2% as reported to $197 million, with a 5.7% decline adjusted for Byte impact.
EDS sales declined 2.7% as reported to $376 million, primarily due to lower volumes in Americas and EMEA.
CAD/CAM revenue was down mid-single digits, driven by lower volumes in the Americas and unfavorable price/mix in EMEA.
SureSmile revenue declined double digits, primarily attributable to the Americas region.

Guidance & targets

Category	Target	Timeline	Confidence
Net sales	$3.5 billion to $3.6 billion high materiality	FY26	High
Adjusted EPS	$1.40 to $1.50 high materiality	FY26	High
Q3 2026 Revenue	decline sequentially medium materiality	Q3 · FY26	High
Q3 2026 Earnings	below Q2 2026 levels medium materiality	Q3 · FY26	High
Investment benefits	increasingly visible beginning in Q4 medium materiality	Q4 · FY26	Medium
U.S. business exit rate	with a plus sign medium materiality	Q4 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Connected Technology Solutions (CTS) As-reported decline, with Equipment & Instruments flat due to declines in Treatment Centers offset by imaging growth in EMEA. CAD/CAM impacted by Americas volumes and EMEA price/mix, partially offset by APAC growth. EMEA saw some softening due to Middle East uncertainties. Equipment & Instruments revenue: $137M (flat YoY)CAD/CAM revenue: $102M (down mid-single digits)Imaging equipment growth: particularly in EMEACAD/CAM Americas: lower volumesCAD/CAM EMEA: unfavorable price/mixCAD/CAM APAC: double-digit growth	$239M	-1.5%	—	—
Essential Dental Solutions (EDS) As-reported decline primarily driven by lower volumes. EMEA was impacted by distributor inventory reductions, though sell-out was consistent with expectations for dental consumables. Sequential improvement in Q2 for EMEA dynamics. Lower volumes: Americas and EMEAEMEA distributor inventory reduction: negative impactEMEA sell-out: low single digitsEMEA sell-in: lower year-over-year	$376M	-2.7%	—	—
Orthodontics and Implant Solutions (OIS) Significant as-reported decline, partially due to the Byte impact. IPS revenue declined due to lower premium implant volumes in Americas and APAC, while EMEA Implants grew, led by the MIS brand. SureSmile experienced double-digit declines, mainly in the Americas. Adjusted for Byte impact: -5.7% as reportedIPS revenue: declined mid-single digitsPremium implants: lower volumes in Americas and APACEMEA Implants: grew mid-single digitsMIS (value implant brand): improved performance in EMEASureSmile revenue: $40M (declined double digits)SureSmile Americas: primary attributable region for decline	$197M	-13.2%	—	—
Wellspect Healthcare Strong growth driven by continued strength of new product sales and execution, partially offset by lower inventory levels in the U.S. market. New product sales: continued strengthExecution by the business: strongU.S. market: lower inventory levels (partially offsetting growth)	$86M	+7.1%	—	—

Product announcements

Product	Type	Timeline	Details
Wellspect Healthcare new products	launch	Q2 FY26
DS Core implementation	milestone	Q2 FY26

Deals & partnerships

Atlanta Dental Expansion of partnership for U.S. distribution footprint.

Announced expansion of partnership to strengthen U.S. distribution footprint.

Nashville Dental Expansion of partnership for U.S. distribution footprint.

Announced expansion of partnership to strengthen U.S. distribution footprint.

Medline Sinclair Advanced long-standing relationship in Canada, expanding capital side.

Advanced long-standing relationship in Canada, specifically expanding on the capital side, which was not previously covered. This provides natural reach and faster product access in Canada.

Risks & headwinds

Macroeconomic uncertainties in EMEA Q2 FY26, ongoing

Softening demand for select areas of capital equipment, delays in investment decisions.

Mitigation:Monitoring the situation; hoping for resolution in Q3/Q4.

Distributor inventory reduction in EMEA Q2 FY26, ongoing

EDS sell-in lower year-over-year, with distributors reducing inventory levels from ~12+ weeks to ~8 weeks.

Mitigation:Management believes this is not a demand-driven trend and is gaining visibility into dynamics.

Byte impact on OIS segment Q2 FY26, ongoing

OIS declined 5.7% as reported when adjusting for the year-over-year impact from Byte.

Mitigation:Continued focus on the overall Return-to-Growth Action Plan.

SureSmile revenue decline in Americas Q2 FY26, ongoing

SureSmile revenue declined double digits, primarily attributable to the Americas region.

Mitigation:Part of the turnaround plan, focusing on re-engaging orthodontists, hiring sales force, and modernizing software.

Increased freight costs due to Middle East tensions Q2 FY26, ongoing

Unquantified impact on costs.

Mitigation:Absorbing impacts to date; will consider adjusting bottom line if pressures remain high.

What to watch in Q3 FY26

New dealer partnership contributions

Q3/Q4 FY26

Current Small numbers, some double-digit growth from 2 new dealers

Target Heavier contributions to revenue, particularly capital sales

Why it matters

New dealer partnerships are a key component of the U.S. commercial expansion and Return-to-Growth plan, with a typical 9-month ramp-up to production.

And I always mention it's about 9 months before you really produce there to sell capital. And so you're bringing them on board, training them, getting their reps out there, building a pipeline and then closing. And so while we are positive and seeing positive results of who we brought on, I think that will be heavier in the fourth quarter than perhaps what we've seen in the first or second.

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Q&A highlights

Why did John Fortson join Dentsply Sirona, and does management feel the leadership team is now complete to execute the turnaround plan? Also, what are the drivers for the expected Q4 improvement?

John Fortson was drawn by the Board and leadership's commitment to the turnaround plan and the opportunity to restore the business. Dan Scavilla confirmed the executive committee is strong and complete. Q4 improvement is expected from the timing of structural reorganizations and the maturation of new dealer partnerships, which typically take about 9 months to generate significant capital sales.

“Yes, we have who we need to make the changes that we need to make. I feel very strong about that.”

asked by Elizabeth Anderson · answered by Daniel Scavilla

2 min read 7 chapters

Detailed narrative

Return-to-Growth Action Plan Progress

Six months into the 24-month Return-to-Growth Action Plan, Dentsply Sirona is focused on customer-centricity, improved execution, strategic investments, and strengthening its financial foundation. While acknowledging the turnaround is ongoing and not linear, management sees encouraging signs of traction, with improvements expected to be weighted towards Q4 due to investment timing and macroeconomic conditions.

The company is committed to going deeper, moving faster, and taking bolder steps to improve the business.

Customer Engagement and Clinical Education

The company is rebuilding customer engagement, investing in clinical education, and strengthening its commercial organization. Q2 highlights include bringing together over 1,000 clinicians at the Global Implant Summit and hosting the 2026 Endodontic Forum. These initiatives aim to learn from clinicians, strengthen relationships, and ensure the innovation pipeline meets customer needs. Management noted positive feedback from dentists regarding their recommitment to clinical education.

Commercial Organization and Dealer Network Expansion

Dentsply Sirona is investing in its commercial capabilities, including a comprehensive implant certification program for all U.S. implant sales reps. Internationally, APAC is expanding education programs and implant sales training, seeing double-digit growth in milling systems. The company also strengthened its U.S. distribution footprint by expanding partnerships with Atlanta Dental and Nashville Dental, and advancing its relationship with Medline Sinclair in Canada, particularly for capital expansion.

Internal Operational Improvements and Financial Discipline

Internally, the company is simplifying its organization, enforcing accountability, standardizing processes, and embedding lean operating principles and AI to accelerate decision-making. Financial discipline remains a priority, with efforts to improve cash generation and strengthen the balance sheet. The company repurchased 1.3 million shares for approximately $12 million using tariff refund proceeds, aligning with its capital allocation framework.

Wellspect Healthcare Performance

Wellspect Healthcare delivered another strong quarter, with revenue increasing 7.1% as reported to $86 million. This performance was driven by new product sales, geographic expansion, and strong execution. The company views Wellspect as a model for consistent execution and has established a strategic Advisory Board to guide its long-term priorities, innovation, and growth opportunities.

Tariff Impact and Financials

The company received $44 million in tariff refunds in Q2, which translated to a positive $0.17 per share impact. These refunds were not included in the initial guidance. Adjusted EBITDA margins were approximately flat year-over-year, with the tariff benefit offset by lower volumes, sales mix, and incremental tariff impacts.

Operating cash flow significantly increased to $99 million from $48 million in the prior year, partly due to tariff refunds and working capital improvements.

Macroeconomic Conditions and Regional Performance

Management noted some softening demand for capital equipment in EMEA due to uncertainties from the Middle East conflict, causing delays in investment decisions. While the company believes it must improve regardless of market conditions, it is monitoring macro pressures like increased freight costs.

EDS experienced lower volumes in Americas and EMEA, with EMEA impacted by distributor inventory reductions. IPS saw mid-single-digit declines in premium implants in Americas and APAC, while EMEA Implants grew mid-single digits.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.